Fitch Ratings Projects Continued Growth in Underwriting Results
Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) is poised to see further improvement in underwriting profitability in the medium term, driven by consistent premium rate hikes, according to Fitch Ratings.
For the period from April to September 2024, TMNF’s combined ratio improved to 95%, down from 103% the previous year. This improvement was largely attributed to higher premiums in property and motor insurance, which helped offset the financial impact of frequent natural catastrophes in Japan.
Fitch forecasts that ongoing premium rate increases will continue to contribute to stronger underwriting results in the coming years.
Meanwhile, Tokio Marine Holdings, Inc. (TMHD), the parent company of TMNF, is accelerating its strategy to divest domestic equity holdings. By the end of the financial year in March 2025, TMHD aims to sell ¥750 billion ($5.0a1 billion) in equity, a move expected to further bolster its capital adequacy over the next five years.
In a longer-term strategy, TMHD plans to exit all of its strategic domestic equity holdings by fiscal year 2030, significantly reducing its exposure to investment risks.
Looking ahead, TMHD’s international operations are expected to generate more than half of its total insurance premiums by FY 2025. International profits, excluding gains from the domestic equity divestitures, are expected to account for over 60% of the company’s overall profits, with the US market continuing to be the primary driver, contributing more than 80% of international profits.
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